Affiliate marketing is a great way of generating passive income.
You may already know that you can earn commissions from selling other people's products and services on the Internet. But did you know that affiliate programs often pay recurring, passive income? Here are some examples.
Recurring Commissions
If you sell a subscription to a membership service as their affiliate, you receive a monthly commission for as long as the customer stays subscribed. Customers may stay subscribed for years.
This means that you receive recurring income from your initial work. Work once and get paid forever (or at least for months or years). No further effort is required on your part so now you have a monthly passive income.
Some monthly subscription services you can refer for a monthly commission include autoresponders, membership software, shopping carts, web hosting, coaching, and much more.
Two-Tier Commissions
Receive commissions, not only from customers, but from other marketers who sell the product. For example, you might receive a 50% commission for selling a product but you also receive a 10% commission on the sales of products sold by marketers that you referred to the affiliate program.
You could be receiving passive income from the efforts of affiliates you referred.
Lifetime Commissions
Imagine earning a commission from a customer and then earning more commissions from the same customer years later even though you never communicated with that customer again. By referring a customer once, you can receive affiliate commissions on every purchase that customer makes.
Work once and get paid forever (or at least for the lifetime of the customer). Since no further effort is required on your part, you now have additional passive income.
One-Time Affiliate Commissions
It may seem obvious that recurring, two-tier, or lifetime commissions can produce an automated income for you. All of these have a passive nature to them.
So why are we including one-time purchases in our discussion of affiliate marketing for automated income?
Develop Marketing Skills for Passive Affiliate Commissions
First: We need to learn how to make a single sale before we attempt to tackle more advanced methods.
For example, earning a commission for a one-shot sale of a product is easier than recruiting and motivating other marketers to sell affiliate products so that we can earn second tier commissions.
Also, it is often easier for a customer to commit to a one-time purchase than to a monthly, recurring subscription.
Affiliate Marketing Leads to Passive Commissions
Second: A one-time purchase now qualifies our prospect as a paying customer. We can now upsell, downsell, and make special offers at the time of purchase. These offers could include any of the passive income models we have just discussed.
More importantly, we can add the customer to our mailing list. We can continue to develop our relationship with the customer and offer additional, helpful products and services.
An autoresponder service can send a series of emails automatically to build trust, give practical advice, and recommend appropriate products.
Thus, your email marketing now produces automated, passive income (while you sleep or while on vacation).
Work once to produce your autoresponder series and get paid forever (or for as long as the subscriber responds to your emails).
Since no further effort is required on your part, you now have additional passive income.
However, nothing prevents you from sending an additional email at any time to promote a product or service for additional income.
This brings us to our third point.
Earn Both Active Income and Passive Income
Don't reject one-time affiliate commissions just because they aren't passive income.
As we just discussed, non-passive affiliate commissions can lead to passive income.
Additionally, if you needed extra cash and someone offered to pay you extremely well, would you reject the idea just because you had to do a little bit of work for it?
Doing that doesn't make much sense.
So, while building multiple streams of automated, recurring and passive income, be open to the idea of earning some active business income as well.
Affiliate Marketing Advantages
No Support
The product vendor supplies support so you don't need to.
No Product Development
You are selling someone else's product so you don't need one.
Location Independent
You can be home-based or you can travel.
Your Own Affiliate Program
Now we are going to look at the other side of affiliate marketing.
So far, we have looked at how to earn commissions selling other people's products and services through their affiliate programs.
Now we will look at producing an automated income by selling your own products and services through your very own affiliate program or joint venture partners.
Instead of you trying to sell all your products yourself, why not let others sell for you?
The beauty of this is that you only pay for results. You only pay your affiliate if he sells your product.
You could pay $50 for an ad and get no sales. However, if you offered a 50% commission on a $100 product, you would only pay $50 out if (and only if) your affiliate sold the product.
Also, since your affiliates already have a relationship with their customers and prospects, the audience they refer to you will be warm (or more receptive to your offer). The audience from the ad would be cold (or not as receptive as they do not know, trust and like you yet). It is easier to sell to a warm audience so affiliate marketing can have advantages over paid advertising.
Once you have all the pieces in place, you can enjoy automatic traffic and passive income from your affiliate army. Work once and get paid forever.
Affiliate Marketing Passive Income Summary
You can earn affiliate commissions on other people's products and services. You can sell more products to the customer at the time of sale.
You can also add the customer to your mailing list. Using your autoresponder, you can send messages to your customers automatically in order to sell them more products on virtually complete autopilot.
You can join recurring, two-tier and lifetime commission affiliate programs to increase your passive income.
Finally, you can start your own affiliate program to sell your products and services on autopilot. Your affiliates will supply the traffic and customers and you pay only for results.
Author: J. Stephen Pope